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GLOBAL NEWS THE CORPORATE NETWORK THAT RUNS THE WORLD n analysis of the relationships between 43,000 transnational corporations (TNCs) has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy. The study's assumptions have attracted some criticism, but complex-systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further could help to identify ways of making global capitalism more stable, they say. The study, by a trio of complex- systems theorists at the Swiss Federal Institute of Technology in Ziirich, is the first to go beyond ideology to identify empirically such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the TNCs. Previous studies have found that a few TNCs own large chunks of the world's economy, but they included only a limited number of companies and omitted indirect ownerships, so they could not say how this affected the global economy—whether it made it more or less stable, for instance. The Ziirich team can. From Orbis 2007, a database listing 37 million companies and investors worldwide, they pulled out all 43,060 TNCs and the share ownerships linking them. Then they constructed a model of which companies controlled others through shareholding networks, coupled with each company's operating revenues, to map the structure of economic power. The work, to be published in PLoS One, revealed a core of 1,318 companies with interlocking ownerships (see image). Each of the 1,318 had ties to two or more other companies, and on average they were connected to twenty. What's more, although they represented 20 per cent of globa operating revenues, the 1,318 appeared to own collectively through their shares the majority o' the world's large blue-chip and manufacturing firms—the "real" economy—representing a further 60 per cent of global revenues. When the team further untangled the web of ownership, it found tha much of it tracked back to a "super- entity" of 147 even more tightly kni companies—all of their ownership held by other members of the super- entity—that controlled 40 per cen of the total wealth in the network. In effect, less than one per cent o! the companies controlled 40 per cent of the entire network. These are the top 20 of the 147 superconnected companies: 1. Barclays Bank PLC 2. Capital Group Companies, Inc. 3. FMR Corporation 4. AXASA 5. State Street Corporation 6. JPMorgan Chase & Co. 7. Legal & General Group PLC 8. Vanguard Group, Inc. 9. UBS AG 0. Merrill Lynch & Co., Inc. 1. Wellington Management Co., LLP 2. Deutsche Bank AG 3. Franklin Resources, Inc. 4. Credit Suisse Group 5. Walton Enterprises, LLC 6. Bank of New York Mellon Corp. 7. Natixis SA 8. Goldman Sachs Group, Inc. 9. T. Rowe Price Group, Inc. 20. Legg Mason, Inc. {Editor's Note: The data used | in his research is from 2007, i before the "global financial crisis" | Source: New Scientist, 22 October 2o0n1, http://tinyurl.com/69zde4f) The 1,318 transnational corporations that form the core of the economy. Superconnected companies are red; very connected companies are yellow. The size of the dot represents revenue. (Image: PLoS One) 8 * NEXUS JUNE - JULY 2012 www.nexusmagazine.com